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OIL

Statoil, partners to spend 49 billion kroner on new Arctic oil field

Norwegian oil giant Statoil and its partners plan to invest 49 billion kroner (nearly 5 billion euros) to develop the Arctic Johan Castberg oil field, a cost cut in half compared to initial forecasts.

Statoil, partners to spend 49 billion kroner on new Arctic oil field
Statoil's Oslo offices. File photo: Håkon Mosvold Larsen / NTB scanpix

Located about 240 kilometres from the far northern Norwegian town of Hammerfest, the offshore project is scheduled to launch production in 2022, Statoil said in a development plan submitted on Tuesday to the Norwegian authorities.

Its recoverable reserves are estimated at between 450 and 650 million barrels of oil equivalent.

The project's fate has long been uncertain as the necessary investment was initially estimated at more than 100 billion kroner, requiring a barrel at 80 dollars in order to be profitable.

Thanks to a redefinition of the concept and the general drop in costs in the oil services sector, the bill was reduced to 49 billion kroner with a break-even point at less than 35 dollars per barrel.

This investment is good news for the oil sector in Norway, where black gold production has halved since its peak in 2000-2001.

The operation of Johan Castberg is expected to represent about 1,700 jobs, including 500 in northern Norway, Statoil said in a statement.

Statoil owns 50 percent of the project, which includes Italy's Eni (30 percent) and the Norwegian public company Petoro (20 percent).

READ ALSO: Statoil's Arctic exploration fails to find oil

OIL

NGOs take Norway to European Court over Arctic oil exploration

Two NGOs and six young climate activists have decided to take Norway to the European Court of Human Rights (ECHR) to demand the cancellation of oil permits in the Arctic, Greenpeace announced on Tuesday.

NGOs take Norway to European Court over Arctic oil exploration
Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings 

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.

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